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Virgin Media share price leaps 15% as takeover talks with Liberty Global are revealed

Liberty, Virgin Media in Takeover Talks

Ray Le Maistre
2/5/2013
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U.K. cable operator Virgin Media Inc. is in talks to be acquired by international giant Liberty Global Inc. in a deal that could be valued at more than US$20 billion. The operator issued a statement early Tuesday, following speculation in the Financial Times that a deal was in the works, noting that it is "in discussions with Liberty Global, Inc., a leading international cable company, concerning a possible transaction. Any such transaction would be subject to regulatory and other conditions. A further announcement will be made in due course." The news sent Virgin Media's share price rocketing by almost 15 percent on the London Stock Exchange to £28.30, giving the operator a market capitalization of £7.6 billion ($12 billion). The operator also has about £5.7 billion ($9 billion) in debt on its balance sheet, giving it an "enterprise value" of about $21 billion. The move would add another major business to Liberty's European empire, which already includes operations in 11 countries from Ireland in the west to Romania in the east. But it would put a further strain on its finances: The company ended Sept. 2012 with total debt of $26.5 billion and cash and cash equivalents of $3.3 billion. Virgin Media generates revenues of about £1 billion ($1.58 billion) per quarter from its 4.85 million cable and 1.67 million mobile customers. In the third quarter of 2012, it reported revenues of £1.03 billion ($1.62 billion) and an operating profit of £180 million ($284 million). The U.K. operator is due to announce its fourth-quarter and full-year results for 2012 early Wednesday morning. Liberty Global, which generated revenues in Europe of about $2.15 billion in the third quarter of 2012, recently expanded its European business by acquiring a controlling interest in Belgium's Telenet. (See Liberty Global Bids $2.5B for Telenet.) — Ray Le Maistre, International Managing Editor, Light Reading

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Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Beer
2/5/2013 | 3:23:32 PM
re: Liberty, Virgin Media in Takeover Talks
-αIt would be a shrewd move for sure...and I'd never bet against Dr. Malone.-α Also, by my count, this deal would seem to push Liberty Global beyond Comcast in terms of video subscribers.-α Comcast had about 22 million at the end of the third quarter. Liberty Global has 18.2M now, and would be at about 23M once it added Virgin Media's video subs. Liberty Global: the new cable kingpin? JB
Ray Le Maistre
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Ray Le Maistre,
User Rank: Light Sabre
2/5/2013 | 2:32:30 PM
re: Liberty, Virgin Media in Takeover Talks
That has to be my favorite phrase of the year!! Is there a YouTube video to go with it?
craigleddy
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craigleddy,
User Rank: Blogger
2/5/2013 | 1:58:48 PM
re: Liberty, Virgin Media in Takeover Talks
Any time John Malone is involved in a deal, it's fun to watch. He can squeeze blood out of a turnip.
Ray Le Maistre
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Ray Le Maistre,
User Rank: Light Sabre
2/5/2013 | 1:30:13 PM
re: Liberty, Virgin Media in Takeover Talks
Virgin Media has had a real struggle in the past 10 years to stand on its own two feet but has now reached the stage where it has a strong service set and is generating cash. Is this a good time to sell out to a company that's burdened by a debt mountain?-α
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